It's hard to remember what AGL Energy Limited (ASX: AGL) – and its share price – looked like this time last year. There's been many a shakeup in its ranks over the last 12 months. Meanwhile, the war in Ukraine saw the price of power-generating commodities soar, causing volatility in power prices and impacting the energy provider's bottom line.
But that didn't stop the market from bidding the AGL share price higher. It lifted around 30% over 2022, closing the year at $8.07.
For comparison, the S&P/ASX 200 Index (ASX: XJO) ended the year around 5% lower.
Let's take a closer look at what went down with AGL in 2022 and what the market might expect from the stock in the new year.
2022 was a huge year for AGL and its share price
The AGL share price took off last year despite the company heralding a major activist shareholder, watching its CEO and chair walk, and experiencing a major board shake up.
Beyond all that, it binned a major demerger proposal, fielded a takeover offer, and revealed a $20 billion renewables strategy. Safe to say it was a big year for the S&P/ASX 200 Utilities Index (ASX: XUJ) giant.
And much of the drama undergone by the company appeared to be spurred by tech billionaire Mike Cannon-Brookes.
He was part of a consortium offering as much as $8.25 per share to take over AGL in March. When that failed to win over the board, Cannon-Brookes took matters into his own hands.
He snapped up an 11% stake in the company and launched an ultimately successful campaign against its planned split. That led to the exit of former CEO Graeme Hunt, former-chair Peter Botten, and notable board members.
And it wasn't the only successful campaign Cannon-Brookes waged over his investment's leaders last year. The billionaire turned up the heat at the company's annual general meeting (AGM) after the board endorsed just one of four people he nominated to join it. Shareholders ultimately voted in all four.
Last year also saw the 186-year-old energy giant herald a new dawn. It revealed its plan to ditch coal by 2036 – a goal that will likely see it forking out $20 billion on renewable energy assets.
Looking forward
However, perhaps the biggest happening likely to impact the AGL share price in 2023 raised its head late in the year.
The Federal Government's proposed price cap on domestic coal and gas sales – which has since passed the Senate – sparked fury in industry participants. The move is an effort to control power prices and intends to cap gas at $12 a gigajoule.
Experts appear divided as to what it might mean for AGL.
Macquarie believes electricity prices will continue rising this financial year and next, bolstering the company's bottom line, The Australian reports. Ord Minnett, on the other hand, has downgraded the stock on the back of the change. The broker said, via the publication:
We had previously incorporated materially higher prices in our earnings forecasts in FY24, but this now seems unlikely given the interventionist measures introduced by the ALP government.
Finally, broker Jefferies recently began covering AGL, reportedly tipping it to rise to $9.24 – a potential 15% upside.
